Chinese Media(SH:600373) ZHONGTAI SECURITIES·2024-08-16 09:30Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [2]. Core Views - The company is positioned as a leading player in the publishing and distribution sector in Jiangxi, focusing on diversifying its business model and enhancing its operational capabilities [6][14]. - The report highlights the stability of the book market and anticipates a continued increase in the payment rates for SLG (Simulation Game) types of games, indicating a positive outlook for the company's gaming segment [7][33]. Company Overview - The company primarily engages in publishing, distribution, printing, packaging, material trade, new media, and investment, characterized by a multi-medium, platform-based, and full industry chain approach [6][14]. - In 2023, the company achieved a net profit attributable to shareholders of 1.97 billion yuan, with a four-year compound annual growth rate (CAGR) of 3.3% [6]. Industry Analysis - The book market is stable, with a notable increase in the efficiency of new book publishing. The demand for educational materials remains robust, and the decline in birth rates is not expected to impact this segment in the short to medium term [7][33]. - The overseas gaming market is maturing, with stable market shares for SLG games and an expected rise in overall payment rates [7][33]. Operational Analysis - The company's core publishing and distribution business shows resilience, with significant internal brand advantages and ongoing channel expansion efforts [8]. - The company is actively exploring new business models, leveraging its strengths in capital, content, and distribution to drive growth in gaming, education, and marketing sectors [8][14]. - The company plans to utilize its cash reserves for external investments and acquisitions to optimize its industry layout and enhance operational efficiency [8][14]. Financial Forecast and Valuation - The company is projected to achieve revenues of 119.63 billion yuan, 133.58 billion yuan, and 144.68 billion yuan for the years 2024 to 2026, reflecting year-on-year growth rates of 18.63%, 11.67%, and 8.31% respectively [8]. - The net profit attributable to shareholders is expected to be 1.76 billion yuan, 1.89 billion yuan, and 2.03 billion yuan for the same period, with corresponding year-on-year growth rates of -10.47%, 7.41%, and 7.11% [8].